Panic Wanes, Hope Rises, As Nigeria’s Equity Market Await Full-Year, Q3 Financials

Market Update for February 7

At the end of midweek’s trading session, Nigeria’s stock market had a volatile, but mixed session to close south in continuation of its three consecutive days of correction, a signal that reversal is imminent, after the benchmark index gapped in the upside at the early trading hours to intraday highs of 43,921.17 and lows of 43,534.71 points. The market’s mid-morning rally resulted from bargain hunters trying to take advantage of low prices to position. Price depreciation recorded by Dangote Cement and Nigerian Breweries, the NSE’s two biggest stocks by market capitalization by the afternoon session finally pushed the market downward on low volume and negative breadth.

With the ongoing market shakeout gradually coming to end ahead of the earnings reporting season, investors should focus on companies with juicy profit margins and strong balance sheets that will rebound powerfully after their dislocation from this correction wave. The sell down has so far been driven by panic arising from the correction wave sweeping across the international markets that was extended to Nigeria after foreign investors had earlier taken position in expectation of Q4 numbers.
As investors expect early filers to hit the market with their full year earnings reports in the comings days and weeks, first tier banks are likely to pay good dividend, but because of their current market prices yields it may not be too attractive.

That notwithstanding however, expect dividend growth with higher payout ratio, while most of their second tier peers would equally pay dividend but on low payout ratio, arising from their high non-performing loan, which has hit the double-digit range. This arises from the fact that their primary regulator- Central Bank of Nigeria (CBN) will not allow then because they have to make provision for such Non-Performing Loans (NPL) before any dividend is paid. As more companies continuing to announce closed periods, investors are eagerly awaiting dividend declaration to smile to the bank after January capital appreciation gains.

The Nigerian stock market broke down its 20-Day moving average on Wednesday heading to the 50 DMA on a strong selling pressure of 99% and buying position of 1% of the day total transaction, with volume index of 0.59 with money flow index of 69.88 point looking down.

Meanwhile, the composite NSEASI index shed 384.42 points to close at 43,538.16 basis points after opening at 43,877.30, representing a decline of 0.77% on average market traded volume that was lower than the previous day’s. Similarly, market capitalisation dropped by N121.7bn to close at N15.62tr after opening at N15.75tr which also represented 0.77% value loss in investors position.
Laggards included medium and high cap stocks like Stanbic IBTC, Double 11, Julius Berger, Flour Mills, Dangote Flour, FBNH, Access Bank, Julius Berger, International Brewery and Total Nigeria, all of which impacted negatively on the NSE’s Year-To-Date returns, reducing it to 13.85%, just as market capitalisation gain for the period reduced to N2.01tr, representing a 14.80% YTD growth.
The All Share index and all other sectorial indexes closed lower, except for NSE Banking, which closed higher, while NSE AseM that remained unchanged.
The number of decliners outnumbered advancers in the ratio of 40:18, to continue the three-day bear run.

Market activities in volume and value terms for the day were down by 29.12% and 6.91% respectively to 508.3m shares worth N4.57bn, from previous day’s 717.15m units valued at N4.91bn.
Transaction volume for the day was considerably boosted by consumer goods and financial services stocks like LASACO, FBNH, Skye Bank, Access Bank and Dangote Sugar which witness increased trading to top the activity chart as most traded.

The best performing stock for the day were Caverton and Linkage Assurance which notched 9.71% and 6.78% to close at N0.56and N2.78 respectively, on market forces. Unic Insurance and Skye Bank were the worst performing, losing 9.52% and 8.94% to close at N0.38 and N1.12 each, on market forces and profit taking.

TODAY OUTLOOK

As the market is preparing to rebound, expect volatility and portfolio reshuffling/repositioning to continue, while selling pressure reduces ahead of full year audited reports that will be in the market very soon, going by the hanging man candlestick formation pattern as market close yesterday. But stay with value stocks as today trading confirm direction.
However, we would like to reiterate that investors should go for equities with intrinsic value, especially during this season that dividend payment is approaching.
We advise investors to allow numbers guide their decisions while repositioning for the rest of the year’s trading activities, especially now that stock prices remain volatile amidst improving company, economic and market fundamentals.

It is time to combine fundamentals and technical tools to take decision by knowing the support and resistant level to reposition or exit any position. Market is in phases know the cycles in order to manage your trading and investing risk. For stocks that should be on your shopping list to buy in this seasonality changes as the year winds down, sign up to INVESTDATA BUY AND SELL signal setup by calling 08028164085.

Get your home study pack on INVEST 2018 Traders & Investors Summit and ride with the current recovery on Nigeria’s stock market and economy. By investing and trading knowledgeable. You can also still access stocks analysed in the home study pack of the INVEST 2018 traders & investors summit, which includes 15 stocks picks for 2018 are available now to guide your positioning as trading for the year just started.

Comprehensive training materials on stock Trading and Investing for Financial Independence series are Available, you can play and watch on your mobile phone, laptop, desktop and Tv. Kindly call or send yes to 08032055467, 08028164086 or 08111811223.

Chart Summit! Chart Summit!! Chart Summit!!!

Investdata Consulting Ltd is organizing another workshop where experts would simplify market jargons with the aim of increasing understanding and increasing the pool of retail investors.
Theme: ABC of Technical Analysis for the Novices and Advance Traders

Have you traded the stock market before and failed? It is a known fact that about 90% of those who trade without knowledge and understanding of the dynamics will end up losing 90% of their capital most of the time. You don’t have to be one of them.

Therefore, when you attend this Practical ABC Technical Analysis conference, you would learn how to trade such that you become one of the lucky 10%, who manage to consistently play the market profitable by themselves through our SIMPLE trading strategies and buy & sell signal setup.
Consistency is the key to equity trading and investing successfully.

At investdata we have been teaching investors simple and proven strategies which when implemented makes you a successful trader and investor in any market situation, especially when it comes to equipping you well enough to know how to protect their portfolios and profit from market corrections in a recovering economy.

We have also, over time, focused attention on attuning the mindset of investors and traders to managing risk, while eliminating emotions when trading so as to avoid irrational investment decisions.

Attend the Practical Conference on Technical Analysis for the Novices and Advance Traders. We would be taking participants through:
• Understanding the momentum behind current equity movement and when to exit using SIMPLE
        Technical Indicators and Tools to avoid losing capital and profit.
• Our team of experts and time-tested resource persons will show you how you too can
        successfully and confidently trade and invest in stocks profitably on your own from your phone,
        laptop and/or desktop computer.
• Know what the smart money are doing
• Know what they are buying
• How you should buy what they are buying.

The workshop is scheduled as follows:
DATE: February 24. 2018
TIME: 10am – 3.00pm
VENUE: Ostra Hall & Hotel, Behind MKO Abiola Gardens, Opposite NNPC Gas Plant, CBD, Alausa, Ikeja. Lagos.

This chart summit is designed specifically for those who:
• Jump out of profit position in fear of giving profits back?
• Indecision in pulling the trigger because you fear the prospects of a loss?
• Holding on to losing positions because you fear taking the loss?
• Trading often leads into unplanned trades because you fear leaving money on the table?
• Small trade size or investing small amount because you’ve just had a large loss?
• Increasing you position size to try and make up for past losses?

This practical workshop is for novice traders, investors, professionals and fund managers who want to overcome fear and improve their trading performance. The workshop is basically on technical analysis and practical charting teaching on evidence-based techniques that is working in today market. Also the power of focused trading and investing strategies that will help participants build mental skills to turn fear into profits and protect capital.

Registration is ongoing
There will be sales of stock trading and investing materials at the end of the conference, Fundamental and Technical Analysis materials, including home study packs you can play and viewed on your phone, laptop and television set. All at 20% discount for attending. You need to prepare yourself and profit from the market and the recovery economy to truly achieve your financial independence and freedom in 2018. Also come with your laptop.

For more enquiries about the programme, please call 08032055467, 08179547605, and 08111811223.

Ambrose Omordion
CRO|Investdata Consulting Ltd
info@investdataonline.com
info@investdata.com.ng
ambrose.o@investdataonline.com
ambroseconsultants@yahoo.com
Tel: 08028164085, 08032055467
http://investdata.com.ng/2018/02/panic-wanes-hope-rises-nigerias-equity-market-await-full-year-q3-financials/